Jeffrey L. Harmening
Chairman of the Board and Chief Executive Officer at General Mills
Yeah, thanks, Andrew. And let me -- let me start by just kind of reiterating what's kind of in our guidance and what's not and then I'll provide some clarity on kind of what lies ahead even even in uncertain market, and I find that clarity beat certainty in terms of how we think about these things and the guidance, important -- you kind of hit on it that our updated guidance for the year would reflect the beat we had in sales in the first quarter which we just announced, but really didn't have any change in our sales performance for the balance of the year. And I mean, that probably raises the question then if our sales [Technical Issues] remains elevated as for the first quarter, would that indicate that there is a possibility that our sales could be higher and the answer is yes. There is that possibility.
And our second quarter has certainly started out well, particularly in North America, as you look at the retail sales and is looking past, so our second quarter is off to a nice start. But there certainly -- there is a lot of uncertainty in our -- the revised guidance we have did not contemplate yet, revised demand guidance. But I think we have a much better view as Q2 unfolds. And as we announced earnings in Q2, we'll have a better view not only in the quarter, but then how does demand look for the rest of the year.
The other piece of it is really on the bottom line in our guidance with -- our guidance not only contemplates what happened in the first quarter, but also the elevated inflation that we're going to see for the balance of the year. We said it was 7% beginning, that's clearly going to be between 7% and 8% now as we go on the year. It also contemplates some pricing actions that we have taken in order to help address that rising inflation and how our profit comes in will be determined, I think about how much exactly does inflation go up and exactly when does -- what pricing had.
In terms of as we look forward, I think the important things that -- there are a couple of things that are really clear to ask. One is that inflation is going to continue through the balance of our fiscal year, which is to say the first half of calendar '22, that much is clear. It's going to be broad. The second thing is clear is that we've done a really nice job with pricing so far and we -- our prices are going to go up for the remainder of the year as we see inflation going up and so you start to see that at the end of Q1 and by hitting Q2 you'll see more pricing. And our job is to, as we've done for the last three or four years, just kind of stay in the middle of boat, which is to say, we're not going to chase sales growth at the expense of profitability nor are we going to be slave as to profit margin at the expense of things like driving our brands, and this balance of driving sales growth and profitability has served us well over the last few years, and I would argue during the pandemic has served us especially well and we're still in the midst of it. So I think I'll stop there, otherwise it will probably be a filibuster. But I appreciate the starting question.